SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 10, 1998
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Date of Report (Date of Earliest Event Reported)
Orange and Rockland Utilities, Inc.
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(Exact Name of Registrant as Specified in Charter)
New York 1-4315 13-1727729
____________________________ ______________ _____________
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
One Blue Hill Plaza
Pearl River, New York 10965
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(Address of Principal Executive Offices and Zip Code)
(914) 352-6000
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On May 10, 1998, Orange and Rockland Utilities, Inc., a New York
corporation, (the "Company"), Consolidated Edison, Inc., a New York
corporation ("CEI"), and C Acquisition Corp., a New York corporation and a
wholly-owned subsidiary of CEI ("Merger Sub"), entered into an Agreement
and Plan of Merger, dated as of May 10, 1998 (the "Merger Agreement"),
providing for a merger transaction among the Company, CEI and the Merger
Sub. The Merger Agreement and the press release issued in connection
therewith are filed herewith as Exhibits 10.51 and 99.13, respectively,
and
are incorporated herein by reference. The description of the Merger
Agreement set forth herein does not purport to be complete and is qualified
in its entirety by the provisions of the Merger Agreement.
Pursuant to the Merger Agreement, Merger Sub will merge with and into
the Company (the "Merger"), with the Company being the surviving
corporation and becoming a wholly-owned subsidiary of CEI (the "Surviving
Corporation"). The Merger, which was unanimously approved by the boards of
directors of each of the Company, CEI and Merger Sub, is expected to occur
shortly after all of the conditions to the consummation of the Merger,
including the receipt of certain regulatory approvals, are met or waived.
The Company anticipates that regulatory approvals can be obtained in twelve
months.
Under the terms of the Merger Agreement, each outstanding share of the
Company's common stock, $5.00 par value per share (the "Company Common
Stock"), other than shares, if any, owned by the Company, CEI or any of
their wholly-owned subsidiaries, will be converted into the right to
receive $58.50 in cash (the "Merger Consideration"). The Merger
Consideration is expected to be taxed as capital gain to the holders
of the Company Common Stock. Pursuant to the Merger Agreement,
approximately $790 million in cash will be paid to holders of shares of
Company Common Stock. In addition, the Merger Agreement requires the
Company to call for redemption all outstanding shares of the Company's
cumulative preferred stock, par value $100.00 per share, and the Company's
cumulative preference stock, no par value, in each case, at a redemption
price equal to the amount set forth in the Company's Restated Certificate
of Incorporation, together with all dividends accrued and unpaid to the
date of such redemption.
The Board of Directors of the Company has received an opinion from its
investment banker, Donaldson, Lufkin & Jenrette Securities Corporation, to
the effect that, as of the date of the Merger Agreement, the Merger
Consideration to be received by the holders of Company Common Stock in the
Merger is fair from a financial point of view to holders of Company Common
Stock.
The Merger is subject to certain customary closing conditions,
including, without limitation, the receipt of the required approval of the
Company's shareholders and the receipt of all necessary governmental
approvals and the making of all necessary governmental filings, including
the approval of state utility regulators in New York, New Jersey and
Pennsylvania, the approval of the Federal Energy Regulatory Commission, the
approval of the Securities and Exchange Commission under the Public Utility
Holding Company Act of 1935, as amended, and the filing of the requisite
notification with the Federal Trade Commission and the Department of
Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the expiration of the applicable waiting period thereunder. A
meeting of the Company's shareholders to vote upon the Merger will be
convened as soon as practicable and is expected to be held in the third
quarter of 1998.
The Merger Agreement contains certain covenants of the parties pending
the consummation of the Merger. Generally, except for the divestiture of
the Company's generation assets in accordance with the settlement agreement
and the final divestiture plan approved by the New York State Public
Service Commission, the Company must carry on its business in the ordinary
course consistent with past practice and use all commercially reasonable
efforts to preserve intact its present business organization and goodwill.
In addition, the Company may not increase dividends on the Company Common
Stock or issue any capital stock. The Merger Agreement also contains
certain restrictions and limitations on the Company with respect to, among
other things, amendments to the Company's Restated Certificate of
Incorporation and By-Laws, capital expenditures, acquisitions,
dispositions, incurrence of indebtedness, certain increases in employee
compensation and benefits, affiliate transactions, rate matters, contracts
and discharge of liabilities. (See Article VI of the Merger Agreement.)
The Merger Agreement prevents the Company from directly or indirectly
initiating, soliciting, encouraging, or taking any other action to
facilitate knowingly any inquiries or the making of any proposal which
constitutes or may be reasonably expected to lead to any business
combination proposal, or engaging in negotiations with, or providing any
nonpublic information to, any third party relating to a business
combination proposal, unless: (i) a third party submits an unsolicited
business combination proposal and the Company's Board reasonably believes,
in good faith after consultation with its financial advisors, that such
proposal may be more favorable to the Company's shareholders than the
Merger (a "Superior Proposal"); (ii) the Company's Board determines, in
good faith after consultation with its financial advisors and outside
counsel, that failure to furnish information and participate in
negotiations could reasonably be expected to be a breach of its fiduciary
duties under applicable law; and (iii) prior to furnishing nonpublic
information or entering into negotiations, the Company (a) promptly
notifies CEI of the identity of the third party and of the material terms
of the Superior Proposal and that it is furnishing information or entering
into negotiations with the third party and (b) enters into a customary
confidentiality agreement with the third party. The Company may furnish
information to, and participate in discussions and negotiations with the
third party who proposes a business combination that may be a Superior
Proposal for twenty business days before it must make its determination
whether the proposal is more favorable to the Company's shareholders than
the Merger. The Company may terminate the Merger Agreement to accept a
Superior Proposal (in which case, the termination fee provision described
below would be applicable), but before doing so, the Company must give CEI
three business days to make its offer more favorable to the Company's
shareholders than the Superior Proposal.
One current member of the Company's Board of Directors, selected by
the Nominating Committee of CEI's Board of Directors, will be appointed
to the Board of
Directors of CEI. In addition, the Surviving Corporation
will have an advisory board, with equal numbers of members from CEI and
the Company,
that will provide advice and input regarding the implementation
of the Merger and the ongoing operations of the Surviving Corporation. The
Merger
Agreement provides that, after the effectiveness of the Merger (the
"Effective Time"), the Surviving Corporation shall maintain a subsidiary
office in Rockland County, New York as the headquarters of the Surviving
Corporation for three years following the Merger.
The Merger Agreement may be terminated under certain circumstances,
including by mutual consent of the parties; by either CEI or the Company
if the Merger is not consummated by November 30, 1999 (the "Initial
Termination Date"),
subject to an automatic extension of six months if
the requisite statutory approvals have not yet been obtained by the Initial
Termination Date but
all other conditions to closing have been fulfilled or
are capable of being fulfilled by such date; by either CEI or the Company
if the requisite approval of the
Company's shareholders is not obtained at
a duly held shareholders' meeting; by a non-breaching party if there occurs
a material breach of any
representation, warranty, covenant or agreement
contained in the Merger Agreement which is not cured within twenty business
days; or by the
Company, under certain circumstances, in order to accept a
Superior Proposal (subject to the limitations and procedures described
above and to
payment of the termination fee described below).
The Merger Agreement provides that the Company will pay CEI a
termination fee of $25 million if the Merger Agreement is terminated (i)
upon the termination of the Merger Agreement by the Company in order to
accept a Superior Proposal (subject to the limitations and procedures
described above) or (ii) following a termination of the Merger Agreement by
either the Company or CEI as a result of a failure of the Company's
shareholders to grant their approval to the Merger if (x) at the time of
the Company's shareholders' meeting, an acquisition proposal shall have
been made and (y) the Company enters into any acquisition agreement within
two and one-half years of such termination. The Merger Agreement also
provides that if the Merger Agreement is terminated because of a party's
material breach of its representations and warranties or material failure
to perform and comply with its agreements and covenants under the Merger
Agreement, then the defaulting party will pay the other party up to $5
million for its out-of-pocket expenses incurred in connection with the
Merger. In addition, if either CEI or the Company terminates the Merger
Agreement
because the Company's shareholder approval was not obtained,
the Company shall pay CEI up to $5 million for its out-of-pocket expenses
incurred in
connection with the Merger. (See Article IX of the Merger
Agreement.)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
10.51 Agreement and Plan of Merger, dated as of May 10, 1998,
among the Company, CEI and Merger Sub.
99.13 Joint Press Release of the Company and CEI issued May 11,
1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: May 12, 1998
ORANGE AND ROCKLAND UTILITIES, INC.
By: /s/ Robert J. McBennett
_________________________________
Robert J. McBennett
Exhibit Index
Exhibit Description
10.51 Agreement and Plan of Merger, dated as of May 10, 1998,
among Orange and Rockland Utilities, Inc., Consolidated
Edison, Inc. and C Acquisition Corp.
99.13 Joint Press Release of Orange and Rockland Utilities, Inc.
and Consolidated Edison, Inc. issued May 11, 1998.